Question of the Week

Ben is employed by the underwriter of the PCO mutual fund. His job is to visit broker-dealers which distribute the mutual fund and encourage the registered representatives to sell the fund’s shares to their customers. As a part of his “wholesaler’s” job he typically gives reminder-type gifts to representatives, and sponsors incentive contests for tickets to sporting events. Which of the following would be violation of the NASD Rules regarding gifts?

I. An insulated coffee mug bearing the fund’s logo
II. A watch with the fund’s logo, valued at $125
III. A pen and pencil set with the fund’s logo, valued at $50
IV. Season tickets to an NFL team’s games

   
A) II only
B) IV only
C) II, IV
D) II, III, IV

Answer:

The correct answer is C)

NASD Rule 2710 addresses what has been called “special deals”. While gifts of $100 or less per year and “occasional” tickets to sports and social events are permitted, season tickets and the $125 watch would not be allowed.


Professionals FAQs
  1. Where can I look for a financial planner?

    References from trusted friends or family members can help you find a financial planner; however, keep in mind that your friends' financial situations and goals may differ from yours and, therefore, their planners won't necessarily be the best fit for you.The Certified Financial Planner (CFP) Board of Standards certifies financial planners and maintains an online list of certified financial planners on its CFP Board of Standards website.
  2. If I am looking to get an Investment Banking job. What education do employers prefer? MBA or CFA?

    If you are looking specifically for an investment banking position, an MBA may be marginally preferable over the CFA. The caveat here is that the MBA would most probably need to be from a Top-20 B-School.The Chartered Financial Analyst (CFA) is well worth considering if you (a) are aiming for an entry-level position in investment banking, and/or (b) cannot afford to shell out six figures for an MBA or have to settle for a lesser-known B-school.That's because in the investment banking field, most entry-level positions are at the analyst level.
  3. Can I still pass the CFA Level I if I do poorly in the ethics section?

    You may still pass the Chartered Financial Analysis (CFA) Level I even if you fare poorly in the ethics section, but don't count on it. The CFA Institute has long emphasized that ethics is a particular area of focus for it. The seriousness with which the CFA Institute views ethics is evident from the fact that for exam candidates with borderline total scores, performance on the ethics section can mean the difference between passing and failing the exam.
  4. Under the USA, registration as an IAR includes all of the following EXCEPT:

    Under the USA, registration as an IAR includes all of the following EXCEPT: A. Minimum net capitalB. Passing a qualification examC. Filing a consent to service of processD. Posting a surety bond The correct answer is "A", since only an IA would need to prove minimum net capital requirements.